OPINION:
What if we’re addressing the student debt crisis all wrong?
I asked myself this question in 2022 after watching Democrats in Washington try to cancel student loan debt, thereby increasing the cost of college degrees and the resulting debt burden. Meanwhile, Republicans suggested mere tweaks at the margins of higher education. Nearly two years later, Florida is about to enact a more substantial reform — one that taps the power of the market with the goal of revolutionizing college affordability nationwide.
Any day, Florida Gov. Ron DeSantis will sign a bill to make a range of online associate and bachelor’s degrees available to out-of-state students. The cost of such degrees will be capped at $7,000 a year. That’s below the cap for Pell Grants, so low-income students would be able to get a degree free of charge, with money left over for textbooks. For other students, a four-year degree will cost $28,000 at most, with many paying $14,000 or less for a two-year degree.
That’s a savings of between 30% and 80% compared with in-person four-year degrees, including tuition and fees. It’s nearly 90% less than the four-year tuition of a typical out-of-state online bachelor’s degree.
While online degrees aren’t new, Florida’s approach is. Most colleges and universities that offer online programs view out-of-state students as cash cows to milk until they (or taxpayers) run dry. That helps explain why these programs tend to have small enrollment, giving them little influence over the broader marketplace of educational options and affordability.
By contrast, Florida is focused on creating a market. By capping tuition at $7,000, the state is making online degrees more accessible and affordable. It will have the practical effect of holding down the cost of tuition for similar degrees at institutions in other states by introducing a high value, low-cost option for every student in America. State schools are best suited to kick-start a market-driven revolution since taxpayers already underwrite the fixed costs of these public institutions and online classes can be scaled affordably without taxpayer support.
Based on guidance from Mr. DeSantis, legislative leaders, education officials, and university and college presidents, Florida’s new system will begin with three of the state’s most innovative colleges: Miami Dade College, Polk State College and Tallahassee Community College. Others are expected to join the program starting next year.
While some may wonder why the state’s prestigious universities aren’t included, that’s only a matter of time. In my conversations with university leaders, they’re excited at the prospect of dramatically increasing their reach, though they need more time to figure out the details.
The range of degrees will also grow. The colleges will start with the online programs they already run, which are broadly focused on useful careers, not the ideological claptrap at so many other institutions. The list includes nursing, aerospace science, paralegal and legal studies, information systems technology, supply chain management and business administration. The degree programs will be available starting in July, with more coming online every year.
Crucially, taxpayers aren’t on the hook for a cent. The $7,000 tuition cap covers more than each college’s costs, allowing them to devote more money to improving degrees and creating new ones. Since the colleges can admit an unlimited number of students, thereby creating an unlimited revenue stream, there’s a strong incentive to make degree programs excellent, thereby attracting even more students.
The new system builds on Florida’s recent higher education leadership. Earlier this year, the state Board of Education prohibited colleges and universities from using taxpayer money to promote diversity, equity and inclusion programs, refocusing higher education on the higher things. In 2021, Mr. DeSantis and lawmakers enacted a Students’ Right to Know law that gives families hard data on how state college and university degrees compare with one another, based on both expected debt and income. Yet affordable online degrees will be even more impactful, and not just in Florida.
As more schools participate and offer more degrees, more students from across America will look to Florida for a college degree. Their decisions, in turn, will spur lawmakers and institutions in other states to try to win those students back — not with gimmicks, but by offering more affordable and competitive online degrees of their own. That’s the best way to solve the student debt crisis: not by bailing out students or bickering in Washington, but by unleashing the power of a true marketplace in higher education.
• Tarren Bragdon is chief executive officer at the Foundation for Government Accountability.
Please read our comment policy before commenting.